What are ways your clients are mitigating the risks of losing money in their deal analysis?

It's really hard to predict where regulation will go and it is indeed one of the risk factors for all investments.

A duplex strategy is a low-risk entry, saving on living expenses.

One great thing about fix and flip loans is that there is no early payoff penalty, so the original lender's commission is not at risk!

Quote from @Devin James: Quote from @Dominic Mazzarella: Quote from @Devin James: Everything went wrong with this investment:   - Took 4 months longer than expected   - Cost $10K more to build than we anticipated   - Sold for $20K less than we anticipatedWe still profited with a 30% return on equityThis is why I love Real Estate InvestingWhen you do your diligence and stay conservative with your numbers, it takes something really bad to lose money.Here was the original post:My siblings and I are building a home in North Port, FL.Here are the numbers: - Finished Home Value: $412Kish - Land Cost: $19,750.39 - Construction & Permitting Costs: $304,897Additional costs: - Environmental Site Assessment - General Liability Insurance - Builders Risk Insurance - Construction FinancingWe will be listing the home this weekPhotos coming soon!! 

This ensures you will be notified if your tenants cancel their coverage or have a lapse.Adding you as an additional insured would open you up to any claim they would make which  would be a huge risk because those claims would follow YOU for any other purchases you would intend to make for at least 5 years.Your homeowner/landlord policy will provide the liability protection if something was to happen.

Essentially the lenders will be taking a risk on the property if they overvalue it.

I may explain that while I’d like to buy/finance/invest in his property, I need to earn a certain return on my invested capital for the given amount of risk, and if not able to earn the return on the subject deal than I will on the next deal.  

Prioritizes maximizing cash flow, potentially with higher risk or management intensity.Remember, cash flow isn't the only factor!

  $200/month divides into the $100K initial negative equals 500 months to recover the initial negative equity.Let's double the cash flow to $400/month.  250 months to recover the initial negative equity so over 20 years.Let's reduce the negative equity position to $50K (which likely is less realistic than expecting $400/month cash flow at that rent point), you are at over 10 years to recover the initial equity position.Now let's do it with all cash, no financing.The 50% rule state $900/month cash flow.  900 * 12/200K = $5.4% or about half of lifetime return of S&P 500, or what can almost be achieved with a zero work, zero risk CD.I see no way that someone who understands the numbers will call this a good investment.Note just because an investment is better than most other investments in a market does not imply something is a good investment.